FDA Finalizes LDT Regulation, with Significant Exceptions: Enforcement of Requirements Will Phase In over Four Years

On April 29, 2024, the Office of the Federal Register placed on display the Food and Drug Administration’s (FDA) final rule on the regulation of laboratory developed tests (LDTs). Set to be officially published on May 6, this rule follows more than a decade of efforts both by FDA to clarify the regulatory status of LDTs, and after several years of deliberations in Congress regarding reform to the regulatory framework of in vitro diagnostics (IVDs), including LDTs.

FDA published the proposed rule on October 3, 2023, and received approximately 6,500 comments. In response to these comments, FDA did not change its amendments to the regulation itself but is extending enforcement discretion to multiple categories of LDTs and making minor changes to the phased-in implementation of the rule. 

By publishing the rule by mid-May, the LDT rule will likely not be subject to the Congressional Review Act’s look-back period.

FDA’s Oversight of LDTs

FDA has historically exercised enforcement discretion over LDTs, which the agency describes as IVDs “intended for clinical use and that [are] designed, manufactured, and used within a single laboratory that is certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and meets the regulatory requirements under CLIA to perform high complexity testing.” The agency’s position that LDTs meet the statutory definition of a device, which FDA detailed in the preamble to the proposed rule, has been contested by portions of the laboratory community, which assert that FDA lacks authority over LDTs and that additional regulatory oversight is not needed.

Key Points of the Proposed Rule

In the proposed rule, FDA indicated that it intended to amend its regulations to make clear that IVDs, including IVDs manufactured by laboratories, are devices under the Food, Drug, and Cosmetic Act (FDCA). This included a relatively small change to the regulation at 21 C.F.R. 809.3(a):

The proposed rule also included a detailed plan to phase out the existing default posture of enforcement discretion for LDTs. This transition period described in the proposed rule would apply broadly, encompassing “LDTs by laboratories that are certified under CLIA and that meet the regulatory requirements under CLIA to perform high complexity testing, even if those IVDs do not fall within FDA’s traditional understanding of an LDT because they are not designed, manufactured, and used within a single laboratory,” though certain carveouts were included for LDTs that have previously been outside of enforcement discretion (e.g., laboratory tests for emergency use) as well as “1976-Type LDTs”^[i] and tests intended solely for forensic purposes. The final phase of the transition period would conclude with the end of the agency’s general enforcement discretion approach with respect to premarket review requirements for moderate-risk and low-risk IVDs that require premarket submission four years after the publication date of the final rule.

Final Rule

Preamble Response to Comments

FDA received approximately 6,500 comments from stakeholders, including hospitals and academic medical centers (AMCs), commercial laboratories, members of the medical device and pharmaceutical industries, and medical and health care professional associations. The preamble addresses a wide range of comments, categorized into 307 separate comments and responses. These comments and responses address, among other topics: the legal authority for the rule; the evidence relating to performance of LDTs; the impact of the rule (and its phase-in) on test access, small businesses and test innovation; FDA’s estimate of the number of LDTs and the burden of the rule; details of the timeline and transition; the role of CLIA regulation; and the resources needed for implementation of the rule.

Changes to 21 C.F.R. 809.3(a)

FDA has finalized its proposal to clarify that the definition of IVDs at 21 C.F.R. § 809.3(a) is interpreted to include IVDs “when the manufacturer of these products is a laboratory.” With this change, FDA makes explicit its interpretation that IVDs are devices for purposes of the agency’s regulations, even when manufactured by laboratories, and are therefore subject to FDA’s authority.

As proposed, FDA also updated the reference to the definition of medical device to section 201(h)(1) of the FDCA, as discussed above.

What Constitutes an LDT for Purposes of the Rule?

As was the case in the proposed rule, the final rule takes a relatively expansive view of what qualifies as an LDT. In particular, the final rule, including the staged phase-out of enforcement discretion and the areas of continued enforcement discretion, will apply to IVDs manufactured and offered as LDTs by laboratories certified under CLIA and that meet the requirements to perform high-complexity testing, “even if those IVDs do not fall within FDA’s traditional understanding of an LDT because they are not designed, manufactured, and used within a single laboratory.” FDA indicated that it was “adopting this scope because it recognizes that not all laboratories have understood the limited nature of FDA’s general enforcement discretion approach….” 

FDA also clarified certain uses of tests that have not been eligible for enforcement discretion, and will not be in the final rule:

• Direct-to-consumer tests: According to the preamble, FDA has not generally applied its enforcement discretion approach to tests intended for consumer use unless there is “meaningful involvement by a licensed healthcare professional.” FDA will continue to enforce all applicable requirements against these tests, and they are not subject to the phase-out of enforcement discretion or eligible for any subsidiary enforcement discretion policies described in the final rule (see below).
• Tests intended for blood donor screening or human cells, tissues and cellular and tissue-based products (HCT/P) donor screening tests required for infectious disease testing: These tests have not been, and will not be, eligible for enforcement discretion.
• Tests intended for emergencies declared under section 564: As has generally been the case, tests for declared emergencies will require emergency use authorizations (EUAs). However, FDA has issued draft guidance on factors to consider in adopting enforcement discretion policies relating to uses of unauthorized tests in future public health emergencies. FDA has also proposed a separate enforcement policy for tests intended for use for immediate public health response in the absence of a declaration under section 564.

FDA also clarified that LDTs described in FDA's oncology pilot program, Oncology Drug Products Used with Certain In Vitro Diagnostic Tests, will be expected to comply with applicable requirements for IVDs.

Final Rule Phased Implementation

As specified in the final rule, “[f]ollowing a 4-year phaseout period, FDA will no longer have a general enforcement discretion approach for LDTs.” FDA will phase in imposition of regulatory requirements for LDTs under a staged transition plan:

• Stage 1: One year after the final rule is published, FDA will expect compliance with the medical device reporting (MDR) requirements, as well as correction and removal reporting requirements and quality system (QS) requirements pertaining to complaint files (21 C.F.R. § 820.198). The final rule added complaint files to the first stage.
• Stage 2: Two years after publication of the final rule, FDA will “expect compliance with requirements not covered during other stages of the phaseout policy,” which include registration and listing, labeling and investigational use requirements.
• Stage 3: Three years after publication, FDA will expect compliance with QS requirements in 21 C.F.R. Part 820 (excluding the complaint file requirements, which are included in Stage 1).
• Stage 4: Three and a half years after publication, FDA will expect compliance with premarket review requirements for high-risk IVDs offered as LDTs, unless a premarket submission has been received by the beginning of this stage, in which case FDA intends to exercise enforcement discretion while the agency completes review of the relevant application. These LDTs include “IVDs that may be classified into class III or that are subject to licensure under section 351 of the Public Health Service Act.” As a result of this timeline, no applications for existing LDTs would need to be submitted prior to the beginning of Fiscal Year 2028, meaning that laboratories would have the opportunity to participate in negotiations regarding the reauthorization of the medical device user fee program for the period beginning October 1, 2027.
• Stage 5: Four years after publication of the final rule, FDA will expect compliance with premarket review requirements for moderate- and low-risk IVDs offered as LDTs, unless a premarket submission has been received by the beginning of this stage, in which case FDA will, as with Stage 4, apply enforcement discretion during its review of the application.

LDTs That Will Generally Remain Subject to Enforcement Discretion

FDA identified certain comments raising concerns that the rule could lead to loss of access to certain tests that are safe and effective or that are for unmet needs and would not otherwise be available. Based on these comments, FDA substantially expanded the scope of LDTs for which the agency will exercise continued enforcement discretion.

As had been included in the proposed rule, certain LDTs are not going to be subject to enforcement of the rule. FDA will continue to apply enforcement discretion for 1976-Type LDTs, as these tests utilize manual techniques and are performed by laboratory personnel with specialized expertise. As such, these tests are, from FDA’s perspective, in keeping with the agency’s original policy of enforcement discretion. The agency will also continue to exercise enforcement discretion for certain Human Leukocyte Antigen (HLA) tests and tests intended solely for forensic (law enforcement) purposes.

In response to comments on the proposed rule, FDA has also determined to continue its policy of enforcement discretion for other categories of LDTs. However, the scope of enforcement discretion for these categories varies, and is not absolute.

• LDTs manufactured and performed within the Veterans Health Administration (VHA) or the Department of Defense (DOD): General enforcement discretion applies.
• LDTs approved by the New York State Department of Health Clinical Laboratory Evaluation Program (NYS CLEP): This category applies to LDTs that are “approved, conditionally approved, or within an approved exemption from full technical documentation, under NYS CLEP.” FDA believes that NYS CLEP’s review of the analytical and clinical validity of LDTs helps to mitigate the risk of harm from inaccuracy in such tests. FDA will apply enforcement discretion to premarket review requirements only; other requirements apply. FDA intends to request submission of labeling for these tests. FDA specifically noted that the ongoing expectation of compliance with labeling requirements and MDR reporting will help ensure health care providers and patients have appropriate information on test performance and will allow FDA to identify LDTs that raise concerns.
• LDTs for unmet need within a health care system: Enforcement discretion will apply as to premarket review requirements and QS requirements (except for those pertaining to records) for LDTs manufactured and performed by a laboratory integrated within a health care system “to meet an unmet need of patients receiving care within the same healthcare system.” FDA intends to request submission of labeling for these tests. This policy does not extend to tests used for patients treated in an affiliated hospital with different corporate ownership than the laboratory where the test was developed. Furthermore, it will apply only to LDTs that are ordered by a health care practitioner on the staff (with credentials and privileges at a facility owned and operated by the health care system).

FDA also described the criteria for testing for an unmet need, which includes the lack of an FDA-authorized IVD for the disease or condition; the FDA-authorized IVD for the disease or condition is not indicated for use on the patient; or there is an FDA-authorized IVD but it is not available to the patient. FDA intends to provide additional guidance on this policy.

• “Grandfathered” LDTs: Enforcement discretion for premarket review requirements and QS requirements (except for those pertaining to records) will apply to currently marketed LDTs that were first marketed prior to the date of issuance of the rule that are “not modified, or that are modified in certain limited ways.” FDA intends to request submission of labeling for “grandfathered” LDTs, to be used along with MDR reporting and other requirements to analyze the risk presented by these tests and ultimately address those tests that raise specific concerns regarding patient safety.
  
  Modifications to “grandfathered” LDTs that would allow for continued application of enforcement discretion include changes that do not (individually or in the aggregate):

• • Alter the operating principle of the IVD (e.g., changes to critical reaction components).
  • Add “significantly different technology” to the IVD (an example includes the addition of artificial intelligence or machine learning to the test algorithm).
  • Alter the indication for use of the test.
  • Adversely affect the safety or performance of the test.

  Notably, these are not exactly the same criteria that trigger a new submission for an FDA-cleared or approved device.

• LDTs for red blood cell (RBC) antigens: Enforcement discretion and general non-enforcement of premarket review requirements and QS requirements (except for those pertaining to records) for non-molecular antisera LDTs for rare RBC antigens where such tests are manufactured and performed in “blood establishments, including transfusion services and immunohematology laboratories and where there is no alternative available to meet the patient’s need for a compatible blood transfusion.”

The agency has also announced in the final rule that it will also adopt a policy of enforcement discretion with regard to certain modifications by a laboratory of another manufacturer’s lawfully marketed test. Specifically, in circumstances where FDA would not expect a premarket submission from the original manufacturer, the agency will not require a submission by the laboratory making such a modification. These include such modifications as set out in the regulations at 21 C.F.R. 807.81(a)(3) as well as the guidance, “Deciding When to Submit a 510(k) for a Change to an Existing Device.”

Legal Challenges

Some laboratory associations and individual laboratories will likely file suit to challenge the final rule and seek emergency injunctive relief preventing the rule from taking effect. The comments on the rule indicate the legal arguments will include: (i) lack of statutory authority on the theory that LDTs fall outside the FDCA’s definition of devices; and (ii) lack of clear statutory authority to regulate on an issue of major national significance (i.e., the major questions doctrine). Challengers might also argue that FDA failed to adequately estimate and account for the burdens and costs of the rule and to follow procedures required by the Administrative Procedure Act (APA); that the rule violates the First Amendment; and that the rule infringes upon the practice of medicine. Relatedly, it is possible that a plaintiff challenges FDA's application of enforcement discretion, and seeks more uniform application of the regulation.

There is also potential for an entity or group that supports the final rule to file suit, and seek emergency injunctive relief, in an effort to ensure that the rule continues in force. Such an entity or group would likely argue that the final rule is within FDA’s statutory authority and comports with the APA’s requirements.

A motion for emergency injunctive relief would be decided relatively quickly and likely before the final rule’s effective date. A ruling either granting or denying such a motion would be immediately appealable, and (in the event of an initial refusal to enjoin the final rule) a court could suspend the rule’s effective date until the appeal is decided.

Next Steps in Congress

On June 24, 2021, the Verifying Accurate Leading-edge IVCT Development Act of 2021 (the VALID Act) was introduced in both the House and Senate by U.S. Reps. Diana DeGette (D-CO) and Larry Bucshon (R-IN) and U.S. Sens. Michael Bennet (D-CO) and Richard Burr (R-NC). The bipartisan legislation sought to modernize regulatory oversight of IVDs, including LDTs, by creating a single, diagnostics-specific, regulatory framework under the authority of the FDA aimed at promoting innovation and improving patient and public health. The Senate Health, Education, Labor and Pensions Committee advanced the VALID Act as part of the Committee’s work on the 2022 FDA user fee reauthorization; however, the VALID Act did not advance in the House. As noted in prior analyses, the House and Senate were ultimately not able to coalesce around diagnostics reform policy last Congress and these legislative reforms were not included in the 2022 end-of-year package enacted at the end of last Congress.

While Reps. Diana DeGette (D-CO) and Larry Bucshon (R-IN) reintroduced the VALID Act (H.R. 2639) last year, bipartisan legislation has not yet been reintroduced in the Senate. Some stakeholders, notably including FDA representatives, view FDA’s LDT rulemaking as a response, in part, to Congress not passing the VALID Act. This interplay was particularly apparent in March of this year, when the House Energy and Commerce Committee Subcommittee on Health held a hearing entitled “Evaluating Approaches to Diagnostic Test Regulation and the Impact of FDA’s Proposed Rule,” at which there was extensive discussion between Energy and Commerce Committee members and the witnesses regarding both FDA’s proposed LDT rule and the VALID Act.

In the wake of FDA’s release of the final LDT rule, key members on both the Senate HELP and House Energy and Commerce Committee were quick to issue statements asserting that Congress is not done engaging on these issues. Sen. Bill Cassidy (R-LA), Ranking Member of the Senate HELP Committee, issued a statement that “Congress needs to take action to clarify the regulatory structure for diagnostic tests” and noted his previous request for information from stakeholders on how Congress can improve current regulation of clinical tests, including LDTs, to support innovation while ensuring these products are safe and effective. Similarly, Chairwoman Cathy McMorris Rodgers’ statement on the final rule called on FDA to “abandon the rule” and asserted that the agency lacks statutory authority to implement it. Congressman Larry Bucshon, M.D. (IN-08) and Congresswoman Diana DeGette (CO-01) issued a joint statement in which they expressed disappointment that “the FDA has moved ahead with a burdensome rule based on an inflexible statute that was never designed to regulate in vitro diagnostics,” acknowledged that “FDA’s action today is because Congress hasn’t acted yet,” and further highlighted their bipartisan bill (the VALID Act).

While various members of Congress may have strong views on the final rule and the issue of LDT regulation more broadly, it remains unclear if their interest in this issue will rise to the level of legislating on it and in a manner that would impact FDA’s implementation of the final rule for the foreseeable future. The 118th Congress is proving to be a difficult environment for legislating, with few health care bills being enacted, either as stand-alone or as riders to other bills, even for legislative issues that have strong bicameral and bipartisan support behind them. The list of unfinished health care issues that Congress may revisit in a lame-duck session later this year after the November elections only continues to grow. The Energy and Commerce Committee members, including Chairwoman Rodgers (R-WA), Larry Bucshon (R-IN) and Anna Eshoo (D-CA), among others, have announced their retirements at the end of this Congress, and these dynamics will be another consideration that may impact potential congressional action on this issue in the months to come.

Notably, the agency has aligned the timeline of phasing in the marketing submission requirements for LDTs with the next reauthorization of the Medical Device User Fee Amendments (MDUFA), setting the stage for potential future action by Congress on these or related policy issues. While the next reauthorization is still a few years away, FDA envisions that the next MDUFA negotiation would include laboratory stakeholders and consider the implications of LDT marketing submissions. The process for MDUFA reauthorization often entails a very active period of policymaking by Congress as members of Congress seek to attach policy riders to the reauthorization bill, which is considered “must pass” legislation by many stakeholders. Thus, even if Congress does not legislate on this issue this year, it does not foreclose the potential for future Congressional action.

Issues to Watch and Next Steps

FDA will be hosting a webinar to discuss the final rule on Tuesday, May 14 from 1:00-2:00 p.m. ET.

In the interim, please tune in to Akin’s webinar on Thursday, May 2 at 4:30 p.m. ET.

^[i] “1976-Type LDTs” are described as LDTs that feature use of manual techniques that are performed by laboratory personnel with specialized expertise without automation, using components legally marketed for clinical use and are designed, manufactured and used within a single CLIA-certified laboratory that meets the requirements under CLIA for high complexity testing.